UPDATE 1-Startup Trov aims to disrupt insurance with swipe of an app

(Adds information about AXA Insurance)

By John McCrank

Nov 21 The on-demand economy, which uses
smartphone technology to immediately fill consumer needs, has
changed the way people order food, a car, or a place to stay.
Now, technology startups are targeting the next business
frontier - insurance - offering coverage with the swipe of an
app.

Trov, a San Francisco Bay Area firm that provides
smartphone-based on-demand insurance for individual assets, like
computers or cameras, for any duration, launched in the United
Kingdom on Tuesday, backed by AXA Insurance, a subsidary of AXA
SA.

"We literally track risk to the second so when you turn
something on, it turns it on to the second and then it prices
your usage to the second should you want to turn it off," Scott
Walchek, Trov's chief executive officer, said in an interview
last week. "It's literally the same swipe right to turn it on,
swipe left to turn it off."

The multitrillion-dollar dollar insurance industry is poised
to be transformed "beyond recognition" by new technologies like
artificial intelligence, new payment systems, drones and
blockchain, CommerzVentures GmbH said in a white paper in March.

"Effectively cooperating with startups may be the only way
for incumbent insurers to fend off potential competitors such as
Google, Amazon, Facebook and other
non-traditional players," said CommerzVentures, the fintech
venture capital fund of CommerzBank.

Trov has been doing business in Australia for the past five
months in partnership with Suncorp Group Ltd and plans
to launch next year in the United States, where it has teamed up
with Munich Re, Walchek said.

Trov's main users are millennials who live "untethered"
lifestyles, meaning they might work from home or from a coffee
shop with their laptop, which they want to protect, Walchek
said.

The firm started with electronics and photography equipment
coverage in the UK, and will add other insurance categories
going forward, such as sporting goods, Walchek said.

The insurance industry has been slow to adopt new,
potentially disruptive technologies, in part because it is
subject to moral hazard and adverse selection, said Erik
Brynjolfsson, professor at Massachusetts Institute of
Technology's Sloan School of Management.

"Meaning that one party may know information that the other
doesn't and markets tend to break down in those situations," he
said in an interview.

Technology firms' ability to mine vast amounts of web-based
data, along with the type of ratings systems used by firms like
Airbnb and Uber to verify trustworthiness and reliability, may
help insurers overcome those barriers, he added.
(Reporting by John McCrank in New York; Editing by Matthew
Lewis)

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